THE AUROVILLE FOUNDATION ACT, 1988 
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ARRANGEMENT OF SECTIONS 
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CHAPTER I 

PRELIMINARY 

SECTIONS 

1.  Short title. 
2.  Definitions. 

ACQUISITION AND TRANSFER OF UNDERTAKINGS OF AUROVILLE 

CHAPTER II 

3.  Transfer to, and vesting in, the Central Government of certain undertakings of the Society, trust 

and bodies. 

4.  General effect of vesting. 
5.  Central Government or Foundation to be liable for certain prior liabilities. 
6.  Power of Central Government to direct vesting of the undertakings in the Foundation. 
7.  Management, etc., of the undertakings. 
8.  Duties of persons in charge of management by undertakings to deliver all assets. 
9.  Certain powers of the Central Government or the Foundation. 

CHAPTER III 

THE AUROVILLE FOUNDATION 

10.  Establishment and incorporation of the Foundation. 
11.  Governing Board. 
12.  Term of office of members. 
13.  Salary and allowances and other conditions of service of Chairman. 
14.  Meetings of the Governing Board. 
15.  Secretary and other officers of the Foundation. 
16.  Committees of the Governing Board. 
17.  Powers and functions of the Governing Board. 
18.  Residents‟ Assembly. 
19.  Functions of Residents‟ Assembly. 
20.  Working Committee or Residents‟ Assembly. 
21.  Advisory Council. 
22.  Dissolution of the Foundation. 
23.  Grant by Central Government to the Foundation. 

CHAPTER IV 

MISCELLANEOUS 

24.  Duty to furnish returns, etc. 
25.  Borrowing powers of the Governing Board. 
26.  Accounts and audit. 
27.  Act to have overriding effect. 
28.  Contracts to cease to have effect unless ratified by the foundation. 
29.  Penalties. 
30.  Protection of action taken in good faith. 

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SECTIONS 

31.  Power to make rules. 
32.  Power to make regulations. 
33.  Rules and regulations to be laid before Parliament. 
34.  Power to remove difficulties. 

THE SCHEDULE 

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THE AUROVILLE FOUNDATION ACT, 1988 

ACT NO. 54 OF 1988 

An  Act  to  provide  for  the  acquisition  and  transfer  of  the  undertakings  of  Auroville  and               

to vest such undertakings in a foundation established for the purpose with a view to making 
long-term arrangements for the better management and further development of Auroville in 
accordance with its original charter and for matters connected therewith or incidental thereto. 

WHEREAS  Auroville  was  founded  by  the  „Mother‟  on  the  28th  day  of  February,  1968  as  an 

international cultural township; 

[29th September, 1988.] 

AND WHEREAS in view of the serious difficulties which had arisen with regard to the management of 
Auroville, the management thereof had been vested in the Central Government for a limited period by the 
Auroville (Emergency Provisions) Act, 1980 (59 of 1980); 

AND WHEREAS under the management of the Central Government and under the overall guidance of 
the  International  Advisory  Council  set  up  under  the  aforesaid  Act,  Auroville  had  been  able  to  develop 
during the last eight years along several important lines and the residents of Auroville have also carried 
on activities for the development of Auroville which need further encouragement and consolidation; 

AND  WHEREAS Auroville was developed as a cultural township with the aid of funds received from 
different organisations in and outside India as also from substantial grants received from the Central and 
State  Governments,  and  the  United  Nations  Educational  Scientific  and  Cultural  Organisation  also  had, 
from time to time, reflected in its resolutions that the project on Auroville is contributing to international 
understanding and promotion of peace; 

AND WHEREAS for the purpose of encouraging, continuing and consolidating the aforesaid activities 
of  Auroville,  it  is  necessary  in  the  public  interest  to  acquire  the  undertakings  of  Auroville  and  to  vest 
them in a body corporate established for the purpose; 

BE it enacted by Parliament in the Thirty-ninth Year of the Republic of India as follows:— 

CHAPTER I 

PRELIMINARY 

1. Short title.—This Act may be called the Auroville Foundation Act, 1988. 

2. Definitions.—In this Act, unless the context otherwise requires,— 

(a) “appointed day” means the date of commencement of this Act; 

(b) “Auroville” means so much of the undertakings as form part of, or are relatable to, the cultural 
township which is known as Auroville and the charter of which was proclaimed by the „Mother‟ on 
the 28th day of February, 1988; 

(c)  “Council”  means 

the  Auroville  International  Advisory  Council  constituted  under                  

sub-section (1) of section 21; 

(d)  “Custodian”  means  the  person  who  is  appointed  as  the  Custodian  under  sub-section  (2)  of 

section 7 in respect of the undertakings; 

(e) “Foundation” means the Auroville Foundation established under sub-section (1) of section 10; 

(f)  “Governing  Board”  means  the  Governing  Board  of  the  Foundation  constituted  under           

sub-section (1) of section 11; 

(g) “notification” means a notification published in the Official Gazette; 

(h) “prescribed” means prescribed by rules made under this Act; 

(i) “Residents Assembly” means the Residents‟ Assembly of the Foundation; 

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(j)  “Society”  means  Sri  Aurobindo  Society,  being  a  Society  as  defined  in  the  West  Bengal 
Societies Registration Act, 1961 (West Bengal Act XXVI of 1961), and having its registered office at 
Calcutta in the State of West Bengal; 

(k) “specified date” means such date as the Central Government may, for the purpose of section 9, 

by notification, specify; 

(l) “trust” or “body” means a trust or body specified in the Schedule; 

(m) “undertakings” means the undertakings of the Society, trust or body which had vested in the 

Central Government under section 3. 

ACQUISITION AND TRANSFER OF UNDERTAKINGS OF AUROVILLE 

CHAPTER II 

3. Transfer to, and vesting in, the Central Government of certain undertakings of the Society, 
trusts and bodies.—On the appointed day, so much of the undertakings of the Society, trust and body as 
form part of, or are relatable to Auroville, and the right, title and interest of the Society, trust and body, in 
relation  to  such  undertakings,  shall,  by  virtue  of  this  Act,  stand  transferred  to,  and  vest  in,  the  Central 
Government. 

4.  General  effect  of  vesting.—(1)  The  undertakings  vested  under  section  3  shall  be  deemed  to 
include all the assets, rights, leaseholds, powers, authorities and privileges, and all property (movable and 
immovable),  including  lands,  buildings,  works,  workshops,  projects,  stores,  instruments,  machinery, 
automobiles  and  other  vehicles,  cash  balances,  funds,  including  reserve  funds,  investments  and  book 
debts of the Society, trust or body as form part of, or are relatable to, Auroville and all other rights and 
interests arising out of such properties as were immediately before the appointed day in the ownership, 
possession,  power  or  control  of  the  Society,  trust  or  body,  whether  within  or  without  India,  and  all    
books of account, registers, maps, plans and all other documents of whatever nature relating thereto. 

(2)  All  properties  and  assets  as  aforesaid  which  have  vested  in  the  Central  Government  under   
section  3 shall,  by  force  of  such  vesting,  be freed  and  discharged  from  any  trust,  obligation,  mortgage, 
charge, lien and all other incumbrances affecting them or of any attachment, injunction, decree or order of 
any court or other authority restricting the use of such properties or assets in any manner or appointing 
any receiver in respect of the whole or any part of such properties or assets shall be deemed to have been 
withdrawn. 

(3) Any licence or other instrument granted to the Society, trust or body in relation to any undertaking 
which has vested in the Central Government under section 3 at any time before the appointed day and in 
force  immediately  before  the  appointed  day,  shall  continue  to  be  in  force  on  and  after  such  day  in 
accordance with its tenor in relation to and for the purposes of such undertaking or where the undertaking 
is directed under section 6 to vest in the Foundation, the Foundation shall be deemed to be substituted in 
such licence or other instrument as if such licence or other instrument had been granted to the Foundation 
and the Foundation shall hold it for the remainder of the period for which the Society, trust or body would 
have held it under the terms thereof. 

(4) If, on the appointed day, any suit, appeal or other proceeding, of whatever nature, in relation to 
any property or asset which has vested in the Central Government under section 3, instituted or preferred 
by or against the Society, trust or body is pending, the same shall not abate, be discontinued or be, in any 
way, prejudicially affected by reason of the transfer of the undertakings of the Society, trust or body or of 
anything contained in this Act, but the suit, appeal or other proceeding may be continued, prosecuted or 
enforced by or against the Central Government, or where the undertakings of the Society, trust or body 
are directed under section 6 to vest in the Foundation, by or against the Foundation. 

5. Central Government or Foundation to be liable for certain prior liabilities.—Every liability in 
relation to any undertaking in respect of any period prior to the appointed day shall be enforceable against 
the  Central  Government  and  not  against  the  Society,  trust  or  body,  or  where  the  said  undertakings  are 
directed, under section 6, to vest in the Foundation, against the Foundation. 

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6.  Power  of  Central  Government 

to  direct  vesting  of 

the  undertakings 

in 

the          

Foundation.—(1) Notwithstanding anything contained in sections 3 and 4, the Central Government shall, 
as soon as may be after the appointed day, direct, by notification, that the undertakings and the right, title 
and interest of the Society, trust or body in relation to such undertakings which had vested in the Central 
Government under section 3, shall, instead of continuing to vest in the Central Government, vest in the 
Foundation either on the date of publication of the notification or on such earlier or later date as may be 
specified in the notification. 

(2) Where the right, title and interest of the Society, trust or body in relation to the undertakings vest, 
under sub-section (1), in the Foundation, the Foundation shall, on and from the date of such vesting, be 
deemed  to  have  become  the  owner  in relation to  such  undertakings  and  the  rights  and liabilities  of the 
Central  Government  in  relation  to  such  undertakings  shall,  on  and  from  the  date  of  such  vesting,  be 
deemed to have become, the rights and liabilities, respectively, of the Foundation. 

7. Management, etc., of the undertakings.—(1) The general superintendence, direction, control and 
management of the affairs of the undertakings, the right, title and interest in relation to which have vested 
in the Central Government under section 3, shall,— 

(a)  where  a  direction  has  been  made  by  the  Central  Government  under  sub-section  (1)  of    

section 6, vest in the Foundation; or 

(b)  where  no  such  direction  has  been  made  by  the  Central  Government,  vest  in  a  Custodian 

appointed by the Central Government under sub-section (2), 

and,  thereupon,  the  Foundation,  or  the  Custodian  so appointed,  as  the  case  may  be,  shall  be  entitled to 
exercise  all  such  powers  and  do  all  such  things  as  the  Society,  trust  or  body,  as  the  case  may  be,  is 
authorised to exercise and do in relation to its undertakings. 

(2) The Central Government may appoint any person as the Custodian of the undertakings in relation 

to which no direction has been made by it under sub-section (1) of section 6. 

(3) The Custodian so appointed shall receive such remuneration as the Central Government may fix 

and shall hold office during the pleasure of the Central Government. 

8. Duties of persons in charge of management by undertakings to deliver all assets.—(1) On the 
vesting of the management of the undertakings in the Foundation or on the appointment of a Custodian 
under section  7,  all  persons  in  charge  of the  management  of  the  undertakings  immediately  before  such 
vesting or appointment shall be bound to deliver to the Foundation or Custodian, as the case may be, all 
assets, books of account, registers and other documents in their custody relating to the undertakings. 

(2) The Central Government may issue such directions as it may deem desirable in the circumstances 
of the case to the Custodian as to the powers and duties of the Custodian and such Custodian may also, if 
it is considered necessary so to do, apply to the Central Government at any time for instructions as to the 
manner in which the management of the undertakings shall be conducted or in relation to any other matter 
arising in the course of such management. 

(3)  Any  person,  who  on  the  appointed  day,  has  in  his  possession  or  under  his  control,  any  books, 
documents  or  other  papers  relating  to  the  undertakings  shall  be  liable  to  account  for  the  said  books, 
documents or other papers to the Central Government or the Foundation, as the case may be, and shall 
deliver them up to the Central Government or the Foundation or to such person or body of persons as the 
Central Government or the Foundation may specify in this behalf. 

(4) The Central Government or the Foundation may take or cause to be taken, all necessary steps for 
securing possession of all undertakings which have vested in the Central Government or the Foundation 
under this Act. 

(5) The Society, trust or body shall, within such period as the Central Government may allow in this 
behalf,  furnish  to  that  Government  a  complete  inventory  of  all  its  properties  and  assets,  as  on  the 
appointed  day  pertaining  to  the  undertakings  and,  for  this  purpose,  the  Central  Government  or  the 
Foundation shall afford to the Society, trust or body all reasonable facilities. 

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9. Certain powers of the Central Government or the Foundation.—The Central Government or 
the Foundation shall be entitled to receive up to the specified date, to the exclusion of all other persons, 
any  money  due  to  the  Society,  trust  or  body  in  relation  to  its  undertakings  which  have  vested  in  the 
Central  Government  or  the  Foundation,  as  the  case  may  be,  and  realised  after  the  appointed  day, 
notwithstanding that the realisation pertains to a period prior to the appointed day. 

CHAPTER III 

THE AUROVILLE FOUNDATION 

10.  Establishment  and  incorporation  of  the Foundation.—(1)  With  effect  from  such  date  as the 
Central Government may, by notification, appoint in this behalf, there shall be established for the purpose 
of this Act, a Foundation, to be called the Auroville Foundation. 

(2) The Foundation shall be a body corporate by the name aforesaid, having perpetual succession and 
a common seal with power to acquire, hold and dispose of property, both movable and immovable, and to 
contract and shall by the said name sue and be sued. 

(3) The Foundation shall consist of the following authorities, namely:— 

(a) the Governing Board; 

(b) the Residents‟ Assembly; 

(c) the Auroville International Advisory Council 

11.  Governing  Board.—(1)  The  Governing  Board  shall  consist  of  the  following  members, 

namely:— 

(i)  not  more  than  seven  members  to  be  nominated  by  the  Central  Government  from  amongst 

persons, who have— 

(a) rendered valuable service to Auroville; 

(b)  dedicated  themselves  to  the  ideals  of  life-long  education,  synthesis  of  material  and 

spiritual researches or human unity; 

(c)  contributed  significantly  in  activities  that  are  being  persued  or  are  envisaged  to  be 
promoted in Auroville, including activities relating to environment, afforestation, arts and crafts, 
industry, agriculture, humanities, sciences and integral yoga; 

(ii) two representatives of the Central Government to be nominated by it. 

(2) The Central Government shall nominate a Chairman of the Governing Board from amongst the 

members nominated by it under clause (i) of sub-section (1). 

(3) The general superintendence, direction and management of the affairs of the Foundation shall vest 
in the Governing Board which may exercise all the powers and discharge all the functions which may be 
exercised or discharged by the Foundation. 

(4) The Governing Board may associate with itself in such manner and for such purposes as may be 
prescribed, any persons whose assistance or advice it may desire in complying with any of the provisions 
of this Act and a person so associated shall have the right to take part in the discussions of the Governing 
Board relevant to the purposes for which he has been associated, but shall not have the right to vote. 

(5) No act or proceeding of the Governing Board or any committee appointed by it under section 16 

shall be invalidated merely by reason of,— 

(a)  any  vacancy  in,  or  any  defect  in  the  constitution  of,  the  Governing  Board  or  such     

committee; or 

(b) any defect in the nomination of a person acting as a member of the Governing Board or such 

committee; or 

(c) any irregularity in the procedure of the Governing Board or such committee not affecting the 

merits of the case. 

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12. Term of office of members.—(1) Subject to the provisions of this section, the term of office of 
the members of the Governing Board including the Chairman shall be four years from  the date of their 
nomination. 

(2) An outgoing member of the Governing Board shall be eligible for re-nomination. 

(3) The term of office of a member nominated to fill a casual vacancy in the Governing Board shall 

continue for the remainder of the term of the member in whose place he is nominated. 

(4) A member may resign his office by writing under his hand addressed to the Central Government 

but he shall continue in office until his resignation is accepted by that Government. 

13. Salary and allowances and  other conditions of service of Chairman.—The Chairman of the 
Governing Board shall be entitled to such salary and allowances and such conditions of service in respect 
of leave, pension, provident fund and other matters as may, from time to time, be fixed  by the Central 
Government. 

14. Meetings of the Governing Board.—(1) The Governing Board shall meet at least once a year at 

Auroville at such time as may be fixed by the Chairman of the Governing Board. 

(2)  All  the  decisions  at  any  meeting  of  the  Governing  Board  shall  be  taken  by  a  majority  of  the 

members present and voting: 

Provided  that  in  the  case  of  equality  of  votes,  the  Chairman  of  the  Governing  Board  shall  have  a 

casting vote. 

15. Secretary and other officers of the Foundation.—(1) The Central Government shall appoint a 
Secretary to the Foundation to exercise such powers and perform such duties under the Chairman of the 
Governing Board as may be prescribed or as may be delegated to him by the Chairman. 

(2) The  Secretary  shall  be entitled  to  such  salary  and  allowances  and  such  conditions  of  service  in 
respect of  leave,  pension, provident  fund  and  other matters  as  may,  from  time  to  time,  be  fixed  by  the 
Central Government. 

(3)  Subject  to  such  control,  restrictions  and  conditions  as  may  be  prescribed,  the  Governing  Board 
may appoint such other officers and employees as may be necessary for the efficient performance of its 
functions. 

(4) The Chairman, Secretary and other officers and employees of the Foundation shall not undertake 
any  work  unconnected  with  their  duties  under  this  Act  except  with  the  permission  of  the  Central 
Government. 

16. Committees of the Governing Board.—(1) The Governing Board may appoint such committees 
as may be necessary for the efficient discharge of its duties and performance of its functions under this 
Act. 

(2)  The  Governing  Board  shall  have  the  power  to  co-opt  as  members  of  any  committee  appointed 
under sub-section (1), such number of persons who are not members of the Governing Board as it may 
think fit, and the persons so  co-opted shall have the right to attend the meetings of the committee, and 
take part in the proceedings of the committee, but shall not have the right to vote. 

17. Powers and functions of the Governing Board.—The powers and functions of the Governing 

Board shall be— 

(a)  to  promote  the  ideals  of  Auroville  and  to  coordinate  activities  and  services  of  Auroville  in 
consultation with the Residents‟ Assembly for the purposes of cohesion and integration of Auroville; 

(b) to review the basic policies and the  programmes  of Auroville and give necessary directions 

for the future development of Auroville; 

(c) to accord approval to the programmes of Auroville drawn up by the Residents‟ Assembly; 

(d)  to  monitor  and  review  the  activities  of  Auroville  and  to  secure  proper  management  of  the 

properties vested in the Foundation under section 6 and other properties relatable to Auroville; 

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(e)  to  prepare  a  master-plan  of  Auroville  in  consultation  with  the  Residents‟  Assembly  and  to 

ensure development of Auroville as so planned; 

(f) to authorise and coordinate fund-raising for Auroville and to secure proper arrangements for 

receipts and disbursement of funds for Auroville. 

18.  Residents’  Assembly.—(1)  The  Residents‟  Assembly  shall  consist  of  all  the  residents  of 

Auroville who are for the time being entered in the register of residents maintained under this section. 

(2) The Secretary to the Governing Board shall maintain the register of residents in such manner as 
may be prescribed and all the persons who are residents of Auroville and who are of the age of eighteen 
years  and  above  are  entitled  to  have  their  names  entered  in  the  register  on  an  application  made  to  the 
Secretary in such form as may be prescribed. 

(3)  All  the  names  of  residents,  which  have  been  included  in  the  register  maintained  by  the 
Administrator appointed under section 5 of the Auroville (Emergency Provisions) Act, 1980 (59 of 1980) 
immediately before the appointed day, shall be deemed to have been included in the register maintained 
under this section. 

19. Functions of Residents’ Assembly.—(1) The Resident‟s Assembly shall perform such functions 
as are required by this Act and shall advise the Governing Board in respect of all activities relating to the 
residents of Auroville. 

(2) In particular, and without prejudice to the foregoing powers, the Residents‟ Assembly may— 

(a)  allow  the  admission  or  cause  the  termination  of  persons  in  the  register  of  residents  in 

accordance with the regulations made under section 32; 

(b) organise various activities relating to Auroville; 

(c)  formulate  the  master  plan  of  Auroville  and  make  necessary  recommendations  for  the 
recognition  of  organisations  engaged  in  activities  relatable  to  Auroville  for  the  approval  of  the 
Governing Board; 

(d) recommend proposals for raising funds for Auroville for the approval of the Governing Board. 

(3)  For  the  purpose  of  carrying  of  its  functions,  the  Residents‟  Assembly  may  establish  such 
committees  as  it  may  consider  necessary  which  shall  represent  it  in  relation  to  the  functions  to  be 
performed by the Governing Board. 

20. Working Committee of Residents’ Assembly.—(1) There shall be a Working Committee of the 
Residents‟ Assembly which shall assist the Residents‟ Assembly or, as the case may be, the Governing 
Board, in discharging its duties under this Act. 

(2)  The  Working  Committee  shall  consist  of  not  more  than  seven  members  to  be  chosen  by  the 

Residents‟ Assembly from among themselves. 

(3) The manner of choosing the members of the Working Committee and their term of office shall be 

such as may be decided by the Residents‟ Assembly. 

(4)  The  Working  Committee  may,  with  the  approval  of  the  Governing  Board,  create  or  constitute 
other  organisations,  trusts,  societies  or  associations  relatable  to  Auroville  if  the  Working  Committee  is 
satisfied that such organisations, trusts, societies or associations have— 

(a) their headquarters at Auroville; 

(b)  declared  than  in  all  matters  relating  to  Auroville  they  shall  act  in  conformity  with  the 
decisions of the Governing Board and that their main object is to promote the ideals laid down in the 
Charter of Auroville proclaimed by the „Mother‟ on the 28th day of February, 1968. 

21. Advisory Council.—(1) The Auroville International Advisory Council shall consist of not more 

than five members nominated by the Central Government. 

(2) The Central Government may nominate the members of the Council from amongst persons who in 

its opinion are devoted to the ideals of human unity, peace and progress. 

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(3) The Council may, on its own motion or on a reference made to it by the Governing Board, advise 

the Governing Board on any matter relating to the development and management of Auroville. 

(4) In tendering any advice to the Governing Board, the Council shall endeavour to secure that— 

(a) the ideals for which Auroville has been established are encouraged, and 

(b) the residents of Auroville are allowed freedom to grow and develop activities and institutions 

for the fulfilment of the aspirations and programmes envisaged in the said Charter of Auroville. 

(5) There shall be  a  Chairman  of  the  Council  who  shall  be  elected  by  the  members  of  the  Council 

from among themselves. 

(6) The term of office of, the method of filling casual vacancies among, and the allowances and other 
remuneration, if any, payable to, the members of the Council, shall be such as may be determined by the 
Central Government. 

(7) The Council shall have power to regulate its own procedure. 

22.  Dissolution  of  the  Foundation.—(1)  The  Central  Government  may,  by  notification  and  for 
reasons to be specified therein, direct that the Foundation shall be dissolved from such date and for such 
period as may be specified in the notification: 

Provided  that  before  issuing  any  such  notification,  the  Central  Government  shall  give  a  reasonable 
opportunity to the Foundation to make representation against the proposed dissolution and shall consider 
the representation, if any, of the Foundation. 

(2) When the Foundation is dissolved under the provisions of sub-section (1),— 

(a) all members of the Governing Board, notwithstanding that the terms of their office had not 

expired, shall, from the date of dissolution, vacate their offices as such members; 

(b) all powers and duties of the Foundation shall, during the period of dissolution, be exercised 

and performed by such person or persons as the Central Government may appoint in this behalf; 

(c)  all  properties  vested  in  the  Foundation  shall,  during  the  period  of  dissolution,  vest  in  the 

Central Government; and 

(d)  as  soon  as  the  period  of  dissolution  expires,  the  Foundation  shall  be  reconstituted  in 

accordance with the provisions of this Act. 

23.  Grant  by  Central  Government  to  the  Foundation.—For  the  purpose  of  enabling  the 
Foundation  to  discharge  its  functions  under  this  Act,  the  Central  Government  may,  after  due 
appropriation  made  by  Parliament  by  law  in  this  behalf,  pay  to  the  Foundation,  in  each  financial  year, 
such sums of money as that Government considers necessary by way of grant, loan or otherwise. 

CHAPTER IV 

MISCELLANEOUS 

24. Duty to furnish returns, etc.—(1) The Governing Board shall furnish to the Central Government 
at such time and in such form and manner as may be prescribed, or as the Central Government may direct, 
such  returns  and  statements  and  such  particulars  as  the  Central  Government  may,  from  time  to  time, 
require. 

(2)  Without  prejudice  to  the  provisions  of  sub-section  (1),  the  Governing  Board  shall,  as  soon  as 
possible after the end of each financial year, submit to the Central Government a report in such form and 
before  such  date  as  may  be  prescribed  giving  a  true  and  full  account  of  its  activities,  policy  and 
programmes during the previous year. 

(3)  A copy  of  the  report  received under  sub-section (2) shall  be laid, as  soon as  may  be,  after it  is 

received before each House of Parliament. 

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25.  Borrowing  powers  of  the  Governing  Board.—Subject  to  such  rules  as  may  be  made  in  this 
behalf, the Governing Board shall have the power to borrow on the security of the properties of Auroville 
or any other asset for carrying out the purposes of this Act. 

26.  Accounts  and  audit.—(1)  The  Governing  Board  shall  maintain  proper  accounts  and  other 
relevant  records  and  prepare  an  annual  statement  of  accounts,  including  the  income  and  expenditure 
account  and  the  balance-sheet  in  such  form  as  may  be  prescribed  by  the  Central  Government  in 
consultation with the Comptroller and Auditor General of India. 

(2) The accounts of the Foundation shall be audited by the Comptroller and Auditor-General of India 
at  such  intervals  as  may  be  specified  by  him  and  any  expenses  incurred  in  connection  with  such  audit 
shall be payable by the Foundation to the Comptroller and Auditor-General. 

(3)  The  Comptroller  and  Auditor-General  of  India  and  any  person  appointed  by  him  in  connection 
with the audit of the accounts of the Foundation shall have the same rights and privileges and authority in 
connection with such audit as the Comptroller and Auditor-General of India has in connection with the 
audit of Government accounts and, in particular, shall have the right to demand the production of books, 
accounts,  connected  vouchers  and  other  documents  and  papers  and  to  inspect  the  officer  of  the 
Foundation. 

(4) The accounts of the Foundation, as certified by the Comptroller and Auditor-General of India or 
any other person appointed by him in this behalf together with the audit report thereon shall be forwarded 
annually  to  the  Central  Government  and  that  Government  shall  cause  the  same  to  be  laid  before  each 
House of Parliament. 

27.  Act  to  have  overriding  effect.—The  provisions  of  this  Act  shall  have  effect  notwithstanding 
anything inconsistent therewith contained in any other law for the time being in force or in any instrument 
having effect by virtue of any law other than this Act, or in any decree or order of any court, tribunal or 
other authority. 

28. Contracts to cease to have effect unless ratified by the foundation.—Every contract entered 
into  by  the  Society,  trust  or  body  in  relation  to  its  undertakings  for  any  service,  sale  or  supply,  and  in 
force immediately before the appointed day, shall, on and from the expiry of one hundred and eighty days 
from that day, cease to have effect unless such contract is, before the expiry of the said period, ratified in 
writing by the Central Government or, as the case may be, the Foundation, and in ratifying such contract, 
the  Central  Government  or,  as  the  case  may  be,  the  Foundation  may  make  such  alterations  or 
modifications therein as it may think fit: 

Provided that the Central Government or, as the case may be, the Foundation shall not omit to ratify a 

contract and shall not make any alteration or modification therein,— 

(a) unless it is satisfied that such contract is unduly onerous or has been entered into in bad faith 
or is detrimental to the interests of the Central Government or, as the case may be, the Foundation; 
and 

(b)  except  after  giving  the  parties  to  the  contract  a  reasonable  opportunity  of  being  heard  and 
except  after  recording  in  writing  its  reasons  for  its  refusal  to  ratify  the  contract  or  for  making  any 
alteration or modification therein. 

29. Penalties.—A person who,— 

(a) having in his possession, custody or control any property forming part of the undertakings of 
the Society, trust or body, wrongfully withholds such property from the Central Government or, as 
the case may be, the Foundation or any person or body of persons authorised by that Government or 
the Foundation; or 

(b) wrongfully obtains possession of, or retains, any property forming part of any undertaking of 
the Society, trust or body or wilfully withholds or fails to furnish to the Central Government or, as the 
case may be, the Foundation or any person or body of persons authorised by that Government or the 
Foundation, any documents relating to such undertakings which may be in his possession, custody or 
control, or fails to deliver to the Central Government or, as the case may be, the Foundation or any 

10 

 
person  or  body  of  persons  authorised  by  that  Government  or  the  Foundation  any  assets,                 
books  of  account,  registers  or  other  documents  in  his  possession,  custody  or  control  relating  to  the 
undertakings of the Society, trust or body; or 

(c) wrongfully removes or destroys any property forming part of the undertakings of the Society, 

trust or body, 

shall be punishable with imprisonment for a term which may extend to two years, or with fine which may 
extend to ten thousand rupees, or with both. 

30. Protection of action taken in good faith.—No suit, prosecution or other legal proceedings shall 
lie against the Central Government or any officer of that Government or the Custodian or any officer or 
other person authorised by that Government or the Foundation for anything which is in good faith done or 
intended to be done under this Act. 

31.  Power  to  make  rules.—(1)  The  Central  Government  may,  by  notification,  make  rules  for 

carrying out the provisions of this Act. 

(2)  In  particular,  and  without  prejudice  to  the  generality  of  the  foregoing  power,  such  rules  may 

provide for all or any of the following matters, namely:— 

(a)  the  manner  in  which  and  the  purpose  for  which  any  person  may  be  associated  with  the 

Governing Board under sub-section (4) of section 11; 

(b)  the  powers  and  duties  which  the  Secretary  to  the  Governing  Board  may  perform  under       

sub-section (1) of section 15; 

(c)  the  control,  restrictions  and  conditions  subject  to  which  the  Governing  Board  may  appoint 

officers and employees under sub-section (3) of section 15; 

(d)  the  manner  in  which  the  register  of  residents  may  be  maintained  under  sub-section  (2)  of 

section 18; 

(e) the time within which and the form and manner in which the Governing Board may  furnish 

returns and reports under sub-section (1) of section 24; 

(f) the form and the date before which the Governing Board shall submit reports to the Central 

Government under sub-section (2) of section 24; 

(g)  the  rules  subject  to  which  the  Governing  Board  shall  have  the  power  to  borrow  under     

section 25; 

(h) any other matter which is to be or may be prescribed. 

32. Power to make regulations.—(1) The Governing Board may make regulations, not inconsistent 

with this Act and the rules made thereunder, for enabling it to discharge its functions under this Act. 

(2) Without prejudice to the generality of the foregoing power, such regulations may provide for all 

or any of the following matters, namely:— 

(a) the  procedure  to  be  followed at  meetings  of  the Governing  Board  or  at  the  meetings  of  the 
committees appointed by it and the number of members which shall form a quorum at such meetings; 

(b) the delegation to the Chairman, other members, Secretary or other officers of the Governing 

Board, of any of the powers, duties of the Governing Board under this Act; 

(c)  the  travelling  and  other  allowances  payable  to  persons  associated  under  sub-section  (4)  of 

section 11 or co-opted under sub-section (2) of section 16; 

(d) the pay and allowances and leave and other conditions of service of officers (other than those 

appointed by the Central Government) and other employees of the Foundation; 

(e) the maintenance of the accounts of the Foundation; 

(f)  the  maintenance  of  the  registers  and  other  records  of  the  Foundation  and  its  various 

committees; 

11 

 
 
(g)  the  appointment  by  the  Governing  Board  of  agents  to  discharge  on  its  behalf  any  of  its 

functions; 

(h) admission or termination of persons in the register of residents. 

(3) No regulation made by the  Governing Board shall have effect until it has been approved by the 
Central Government and published in the Official Gazette, and the Central Government, in approving the 
regulation, may make changes therein which appear to it to be necessary. 

33. Rules and regulations to be laid before Parliament.—Every rule or regulation made under this 
Act shall be laid as soon as may be after it is made before each House of Parliament while it is in session 
for  a  total  period  of  thirty  days  which  may  be  comprised  in  one  session  or  in  two  or  more  successive 
sessions  and  if  before  the  expiry  of  the  session  immediately  following  the  session  or  the  successive 
sessions  aforesaid,  both  Houses  agree  in  making  any  modification  in  the  rule  or  regulation,  or  both 
Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have 
effect  only  in  such  modified  form  or  be  of  no  effect,  as  the  case  may  be;  so,  however,  that  any  such 
modification or annulment shall be without prejudice to the validity of anything previously done under 
that rule or regulation. 

34. Power to remove difficulties.—(1) If any difficulty arises in giving effect to the provisions of 
this Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove 
the difficulty: 

Provided that no such order shall be made after the expiry of a period of two years from the appointed 

day. 

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each 

House of Parliament. 

12 

 
 
 
THE SCHEDULE 

[See section 2 (l)] 

TRUSTS AND BODIES 

1. Auroville Trust, Auroville. 

2. Artisane Trust, Auroville. 

3. Auroservice d‟Auroville Trust, Pondicherry. 

4. Aurelec Trust, Auroville. 

5. Auromitra, Auroville. 

6. Centre for Scientific Research, Auroville. 

7. Sri Aurobindo International Institute of Educational Research, Auroville. 

8. Altecs Trust, Auroville. 

9. New Engineering Trust, Auroville. 

10. Auro Trust, Pondicherry. 

11. Service Trust, Pondicherry. 

12. Auro Press Trust, Pondicherry. 

13. New Trust, Pondicherry. 

13 

 
